Over the past couple of days I have been researching the mobile phone app business. One of the first decisions that I need to make is simply which platform do I want to target. Do I want to build something on the iOS (Apple iPhone, iPod touch, iPad) or the Android operating system? Clearly the iPhone made a big splash a few years ago and essentially paved the way for mobile phone developers; however, Android powered phones are quickly overtaking the iPhone. So, its not a simple decision. Overall, in today's post I am going to discuss several different aspects to help me determine whether I should build an app for the iPhone or Android powered phones.
First, its important to realize that when you compare the Apple iPhone with all Android powered phones, you are not really comparing apples to apples (hee hee 🙂 ). The iPhone is a phone and Android is a Google operating system that MANY different phones are powered by. However, I will be doing a general review of the market share and growth potential of both to help determine where I should put my focus.
Current Market Share of iPhone vs. Android Phones
Since Apple is a public company – we know exactly how many iPhones they sold in the first quarter of 2011. They sold 16.24 million iPhones in the first 3 months of 2011 according to their first quarter report. This is an 86% unit growth over the first quarter of 2010…wow! So, if we multiply 16.24 by 4 – we can easily project that Apple will sell nearly 65 million iPhones this year (they will probably sell much more if they are anywhere near their 86% growth rate).
Because Google Android powers lots of different phones, its difficult to know exactly how many phones were sold. However, we do have some overall projections into the market share of Android. According to ComScore, Android powered phones make up 33% of all cell phones. This is more than the iPhone share of 25.2% of the market. In addition, Google Android phones had a growth rate of 7% since Nov. 2010 compared to only a 0.2% growth rate for the iPhone.
So, in reality Google Android phones command a larger market share AND they are growing at a faster rate. This makes a pretty strong case for focusing on Android phones. However, what does this mean for the mobile phone application market specifically?
Who is Downloading more Apps?
Its one thing to have more users, like Android does – but its a completely different matter trying to determine which market is making more money from applications. According to Wikipedia, there are over 350,000 apps available in the Apple App Store and there have been over 10 Billion downloads to date. I can't really wrap my head around the enormity of that number.
According to Androlib, (which keeps a live count of Android App downloads) there have been 4.32 Billion Android App downloads at the time of this article. So, iPhone users have downloaded more apps overall, but Android is catching up (it got a late start compared to the iPhone) and its market share is growing quickly.
Also, this article states that Android users vs. iPhone users download almost the exact same number of apps on average. However, where is the money being made?
Which App Stores Bring in the Most Money?
So, overall we can see that iPhone apps have had more downloads – but Android phones are catching up. However, what we really want to see is where most of the money is being made for app developers. According to a report released by IHS Screen Digest in February of 2011, the Apple App Store is the clear winner in Revenue brought in. The Google Android Market is not even close. Check out this graphic:
In 2010, the Apple App Store brought in nearly $1.8 Billion in revenue compared with only $102 million in the Google Android Market. However, the Google Android year over year growth is the highest. So, the Android is indeed catching up, but its still no where close to the Apple App store in terms of money made.
This of course doesn't take into account ad revenue made by developers on free or paid apps. But it does mean that overall, more money is being spent on iPhone applications by far than money spent in the Google Android Market. There are probably alot of reasons for this; some of which may have to do with the fact that every phone running on Android is different. Apps will work differently on certain phones (as I understand) and so the market is less centralized.
So, overall its clear that both options – iPhone apps and Android Apps have great growth potential and both are great markets. However, the iPhone Apps Store is still the dominant player here. Despite the fact that Android powered phones have a larger market share of users and app revenues are growing at a faster pace; the iPhone market is just too big to ignore right now. For that reason, I will be focusing on building an iPhone application for my little journey here on the blog!
This also means that I need to buy an iPhone! I currently don't have an iPhone, but if I am going to be building applications for it – I certainly want to have one so I can test out my own creations! So, in the next little while, I will most likely be picking up an iPhone. Luckily Apple just recently started allowing Verizon users, as I am an existing Verizon Wireless customer.
Next, I will start looking more in depth into the iPhone App store and some of the ins and outs that I need to be aware of before I start hiring any programmers. In addition, I have jotted down 7 or 8 app ideas and I will continue to write down several more as part of the brainstorming process. Anyway, I will be sharing my brainstorming process and the other things I research as I get closer to actually creating a solid plan to get into the iPhone application development business.
What do you think of my analysis of the iPhone and Android markets? Do you agree that developing iPhone applications is still the better business opportunity? Let me know if there is anything else you would like to see discussed here…thanks!